Thursday, December 23, 2010

Thoughts from the Desk

Here is an email I just sent to my friend W (a former trading desk colleague who I still bounce ideas off every now and then). Not a particularly deep email or anything, but it may serve to give a flavor of the way I approach directional macro trading:
There seems to be a clear divergence in markets at the moment. On the one hand commodities especially ags are charging higher. JJS is up over 20% mtd. And soybeans are making their 2nd attempt at clearing resistance at 1350; if they break then the next target is around 1550. So that's bullish. On the other hand EM stocks are clearly weak. China, Brazil and India are all down 10% from their peaks in early Nov and the charts all look quite bearish to me (especially China). For whatever reason, commentators here are completely ignoring the EM swoon [1]. But it could be dangerous, especially if oil continues to rally (remember the rule: if oil use is above 6% of GDP, a recession is coming).

I am uncomfortably reminded of Jan 2008. Then too, oil was at 90ish. Then too, India and China had peaked a few weeks / months previously. Then too ags rallied phenomenally for a few more months before crashing. (This fits in well with my existing thesis that soybeans should rally till June 2011). Of course history never repeats itself exactly, but it does rhyme occasionally. At any rate, I am going to be watching very carefully for signs of a correction (possibly a major correction)...

[1] Everyone on TV is happy because US stocks are melting up into year end. My own theory is that people were convinced that QE2 was a "buy-the-rumor-sell-the-fact" trade and so they unwound their positions in Nov, happy to lock in their profits for the year. Without so many longs left in the game the market was free to rally, and so it did.

41 comments:

  1. I admire what you have done here. I like the part where you say you are doing this to give back but I would assume by all the comments that this is working for you as well.
    Financial Planning

    ReplyDelete
  2. Excellent one and decent article.
    Find it so much informative and enjoy reading.
    What Is SEO

    ReplyDelete
  3. plz provide some new information related to indian stock maket......

    ReplyDelete
  4. Nice information about finance.I am searching this type of information,the way you describe your information is amazing.Thanks for sharing.
    stock market

    ReplyDelete
  5. Very informative article, will be back to read more soon! Until then visit Payment Protection Insurance for more information

    ReplyDelete
  6. its such a nice blog to provides info about debt settlement
    hope more people discover your blog because you really know what you’re talking about. Can’t wait to read more from you!
    for more plz visit
    debt management

    ReplyDelete
  7. tahnks for share very informative articles.
    mis sold ppi

    ReplyDelete
  8. Great post!
    I really enjoy to read this, and also agreed with your conclusions
    Thanks for sharing this information. best ppi claim

    ReplyDelete
  9. Thanks for share such a very informative blog,keep posting,mis sold ppi

    ReplyDelete
  10. The information that you provided was thorough and helpful. I will have to share your article with others.
    agf management

    ReplyDelete
  11. thanks for sharing quality content keep up the great work.
    Dubai offshore

    ReplyDelete
  12. Abd negative impact on the whole world shares

    ReplyDelete
  13. This complimentary report will assist us in helping you. The information is for the sole purpose of preparing your personal Retirement Profile. SEC Rules and Regulations require, call 800-900-5867 or email us at info@retiregroup.com.John Jastremski

    ReplyDelete
  14. A superb and wonderful blog on the thought from the desk.Thanks.

    ReplyDelete
  15. Thanks for the excellent article! Hope to hear more from you!!!!!

    ReplyDelete
  16. Nice thoughts there. This post is pretty much interesting. financial services training

    ReplyDelete
  17. This is very good website. It is very nice deign and content. We offer your visitor easy way convert money paypal to Exchange Paypal to Skrill, Exchange Paypal to Skrill, Exchange Paypal to Payza, Exchange Paypal to Webmoney, Exchange Paypal to bitcoin, Exchange Paypal to okpay, Exchange Paypal to egopay, Exchange Paypal to perfectmoney, Exchange Paypal to liqpay, xchange Paypal to cashu, Exchange Paypal to bank transfer.
    Exchange Paypal to egopay,
    Exchange Paypal to Skrill,
    Exchange Paypal to Skrill,
    Exchange Paypal to Payza,
    Exchange Paypal to Webmoney,
    Exchange Paypal to bitcoin,
    Exchange Paypal to okpay,
    Exchange Paypal to egopay,
    Exchange Paypal to perfectmoney,
    Exchange Paypal to liqpay,
    Exchange Paypal to cashu,
    Exchange Paypal to banktransfer.

    ReplyDelete
  18. This comment has been removed by the author.

    ReplyDelete
  19. Good Day !!

    I am Hwa Jurong, a Reputable, Legitimate & an accredited money
    Lender. I want to use this medium to inform you that i render reliable beneficiary
    assistance as I'll be glad to offer you a loan at 2% interest rate to
    reliable individuals.

    Services Rendered include:

    *Home Improvement
    *Inventor Loans
    *Car Loans
    *Debt Consolidation Loan
    *Line of Credit
    *Second Loan
    *Business Loans
    *Personal Loans
    *International Loans.

    Please write back if interested.
    Upon Response, you'll be mailed a Loan application form to fill. (No social
    security and no credit check, 100% Guaranteed!) I Look forward permitting me to
    be of service to you. You can contact me via e-mail:hwajurong382@yahoo.com hwajurong12@gmail.com
    Yours Sincerely,

    Hwa Jurong(MD).

    ReplyDelete
  20. does she like-Does she like you? Is she attracted? Does she want to kiss you? Should you Talk to her? Here you will learn how to know if she likes you. Does she like me.

    ReplyDelete
  21. This is a great article, if you are canadian and looking for a new or to renew your actual mortgage feel free to visit our website www.reduisez-vos-interets.com we are mortgage broker. Multi-Prets courtier hypothécaire a Montréal

    ReplyDelete
  22. Administratiekantoor voor Den Haag en omgeving Salarisadministraties Financiële administraties Fiscale aangiften Advisering ARO Den Haag

    administratiekantoor den haag
    belastingaangifte den haag
    boekhouder den hag

    ReplyDelete
  23. Rottgering NVM Makelaars voor deskundig advies en begeleiding. Wij zijn actief in de regio groot Den Haag en kennen dit gebied als geen ander. Lees op onze website hoe wij u kunnen helpen.

    makelaar den hag

    ReplyDelete

  24. Hello, Lakewood Financial Institutions is at it again, we give loan to both local and international client in need of a loan. And we give @ 2% rate to all client, so you can contact us via E-mail, lakewook_financialinstitutions@consultant.com

    ReplyDelete